McLEAN, VA—It has been two years since Capital One acquired the Bethesda, MD-based agency lender Beech Street Capital. Since that time, the lender's commercial real estate business has generated over $1.2 billion in incremental business by doing exactly what they told us they would do when the deal was first announced: merge the two complementary product lines -- balance sheet and agency lending -- under one roof. The bank formally debuted this unit last year, although executives at the institution say that the two respective teams began working together from the beginning.
Since the acquisition, Capital One has completed more than $550 million in new transactions, and has another $250 million in progress. It has used its balance sheet to make more than $350 million in new loans, with another $150 million in progress. The $1.2 billion specifically was due to cross-selling efforts.
Typical transactions can be found on both coasts: in June 2015, for example, Capital One Multifamily originators provided a $35.1 million balance sheet construction loan to build The Martin, a six-story apartment complex in San Francisco's Dogpatch neighborhood. One month later, its balance sheet lenders originated a $14.5 million fixed-rate Fannie Mae loan out of the Washington, DC office to refinance Fields of Arlington, a mid-rise affordable housing complex in Arlington, VA.
The combined, one-two punch of the respective platforms has much to do with these originations, Grace Huebscher, president of Capital One Multifamily Finance tells GlobeSt.com -- but also the institution's willingness to listen to borrowers and craft solutions that meet their needs. Sometimes these solutions are put together on the fly.
Huebscher tells of one client that had an agency deal in progress but because of backup at the GSE it didn't look like it would close on time. Capital One provided financing for the transaction until the agency loan came through. "We are not so much product driven but rather focus on listening to our clients needs," she said.
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